The acquisition of Mountain Equipment Co-op (MEC) by the American Kingswood Capital Management risks taking an unexpected turn, as the millions of members of the outdoor cooperative prepare to file a counter-proposal to creditors.
The Supreme Court of British Columbia allowed the Save MEC movement late Thursday to represent the interests of the co-op's 5.4 million members, and to speak on their behalf at an upcoming hearing scheduled for Monday.
“This is a first victory of which we are particularly proud,” says Marie-Hélène Viau, volunteer representative of Sauvons MEC in Quebec. For the past week, the Montreal project manager has chosen to put several parts of her life on hold to devote herself full time to this cause.
Born in the wake of the announcement of the sale of the retailer on September 14, Sauvons MEC wishes to take advantage of the next hearing to request the suspension of the announced transaction. Ideally, the group would like to have two weeks time to allow it to prepare a formal creditors' arrangement proposal.
In financial difficulty, MEC obtained protection under the Companies' Creditors Arrangement Act (CCAA) a little over ten days ago. Subject to court approval, this law would allow the board of MEC to proceed as planned with the sale of the cooperative.
Strength in numbers
This obviously goes without taking into account the importance of the protest movement that has taken shape in recent days. More than 130,000 signatories have signed one or the other of the petitions that have been launched on the Change.org platform. And in seven days, through GoFundMe, Save MEC managed to raise more than $ 100,000 – double its goal – to fund its legal fees.
“I don't know where all this will take us, but I have confidence. I cannot believe that given the scale of this popular mobilization, from coast to coast, the Court and the creditors of MEC – who will ultimately have the last word – will remain insensitive. ”
Save MEC hopes to take advantage of the next few days to conclude agreements with major organizations in the Canadian cooperative sector and face MEC's financial difficulties other than through its privatization.
Nearly $ 100M in receivables
Already, the Quebec Council of Cooperation and Mutuality decided on Friday to support the movement, joining the British Columbia Co-operative Association, the Alberta Community and Co-operative Association and Coopératives et Mutuelles Canada (CMC), which also support the movement.
MEC's major creditors also include Royal Bank and TD Bank. As of September 14, MEC's known debts amounted to $ 98.1M, including $ 69.7M in secured receivables.